Rupee steady on inflows, oil firms buy dollars

Rupee steady on inflows, oil firms buy dollars

Mumbai, 14 September Rupee held steady today, as dollar demand from oil refiners was matched by capital inflows into the stock market, traders said.

At 9:20 a.m., the partially convertible rupee was at 40.45/46 per dollar, unchanged from the previous close.

Traders were wary of building short positions in the dollar with the Reserve Bank of India (RBI) likely to intervene to limit the rupee’s rise.

“The RBI has stayed away, but they could buy dollars around 40.40 levels," a state-run bank trader said.

The central bank said this week it had bought $11.43 billion in intervention in July -- the month the rupee hit a nine-year high of 40.20 against the dollar. It has bought $38.1 billion in intervention in the first seven months of this year.

Some refiners were buying dollars as crude stayed close to $80 per barrel. Oil is India’s biggest import, and high prices raise the risk of widening the country’s trade deficit.

Traders said there were capital inflows too. Foreigners have bought $845 million of local shares in September, taking their net purchases this year to more than $9.2 billion.